Since shallow opinions proliferate on forums like ForexLive in the comments, I just want to debunk on chestnut that pops up 25 or 30 times a day: that quantitative eases leads “inevitably” to a weaker currency.
But lets look at the evidence:
The record low in the dollar index was in March of 2008, well before the Fed began to “print money”. It reached a multi-year high as the Fed kicked QE into gear in the spring of 2009.
The Fed’s balance sheet sits near a record high, just below $3 trln. DXY sits smack in the middle of its 5 year range.
Ergo, the link between quantitative ease and QE is non-existent.
